A chilling forecast from Apollo Global Management says Americans should brace for empty store shelves, layoffs and a summer recession.
The warning comes as new tariffs imposed by President Donald Trump begin to shake the foundation of U.S. supply chains.
“The consequence will be empty shelves in US stores in a few weeks and COVID-like shortages for consumers and for firms using Chinese products as intermediate goods,” Torsten Slok, Apollo’s chief economist, wrote in a note to clients.
According to Slok’s presentation, the slowdown is already in motion. After the tariffs were announced on April 2, containerships departing China began to drop off rapidly.
By early to mid-May, they’re expected to stop entirely.
From there, U.S. ports will quiet down, and by late May, trucking demand will grind to a halt. The next step: layoffs in trucking and retail, followed by a recession in the summer.
Business Pulls Back As Tariffs Hit
Apollo’s data points to a fast deterioration in economic activity.
New business orders are collapsing, capital spending plans are being slashed, and inventories are rising as firms try to get ahead of the tariffs.
Truck sales dropped sharply in March, and CEO confidence is declining. The Logistics Managers’ Index, a key gauge of industry sentiment, is also trending downward.
Slok describes the situation as a “voluntary trade reset recession” triggered by U.S. policy decisions. He adds that this is not a standard slowdown but one caused by deliberate trade barriers.
Americans Are Already Cutting Back
For consumers, the mood isn’t much better. Confidence is near record lows, and spending patterns are shifting.
Chipotle’s Chief Restaurant Officer, Scott Boatwright, noted that customers are eating out less: “Saving money because of concerns around the economy was the overwhelming reason consumers were reducing the frequency of restaurant visits.”
At PepsiCo, CFO Jamie Caulfield echoed the sentiment: “Relative to where we were three months ago, we probably aren’t feeling as good about the consumer now.”
Tourism is also taking a hit, especially international travel.
Data from the National Travel and Tourism Office shows a decline in air arrivals from Europe, Canada and Asia. Even Las Vegas is seeing fewer visitors and lower hotel occupancy.
Meanwhile, financial stress is rising. More households are only making minimum payments on their credit cards, and delinquency rates are going up.
Cash home purchases are down as consumers pull back from big-ticket items.
The Bigger Picture: Stagflation Risk
The Trump administration has paused some tariffs but hiked others, especially on Chinese goods.
Treasury Secretary Scott Bessent admitted Monday that the standoff with Beijing is “unsustainable,” though he argued that the economy is going through a “detox period” rather than heading into recession.
Apollo isn’t buying it. The firm argues the tariffs are creating a stagflation shock, a rare economic environment where prices keep rising while growth stalls.
China may not be the U.S.’s only supplier, but it plays a major role. The U.S. imported nearly $439 billion worth of goods from China in 2024.
Slok emphasized that revenue exposure to China for companies in the S&P 500 is about six times greater than U.S. exports to China, which increases the risk of ripple effects across American industries.
Wall Street analysts are mixed, with some pointing to high inventory levels that could delay the worst of the shortages.
“Don’t expect empty shelves yet — year-to-date stock is still up, and demand is slowing,” said Bernstein analyst Aneesha Sherman.
Still, Apollo’s timeline suggests it’s only a matter of weeks before American consumers start to feel the pinch.
If correct, the summer of 2025 could resemble the early days of the pandemic, only this time, it’s not a virus, but a trade war, that’s to blame.